The Most Recent Comparative Balance Sheet of Giacomelli Corporation Appears

question 101

Multiple Choice

The most recent comparative balance sheet of Giacomelli Corporation appears below: The company uses the indirect method to construct the operating activities section of its statements of cash flows. Which of the following is correct regarding the operating activities section of the statement of cash flows?

• A)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be added to net income
• B)The change in Accounts Receivable will be added to net income; The change in Inventory will be subtracted from net income
• C)The change in Accounts Receivable will be added to net income; The change in Inventory will be added to net income
• D)The change in Accounts Receivable will be subtracted from net income; The change in Inventory will be subtracted from net income

---

Definitions:

Outstanding Deposits

Funds that have been deposited but not yet credited to the depositor's account, often due to processing time.

Trading Costs

Expenses incurred in the process of buying or selling securities, including commissions, spreads, and slippage.

Marketable Securities

Financial instruments that can be quickly converted into cash at market value, such as stocks, bonds, and Treasury bills.